Graham (NYSE:GHM) Releases Earnings Results, Beats Estimates By $0.22 EPS

Key Points

• Graham beat quarterly expectations: EPS came in at $0.49 versus the $0.27 consensus, while revenue reached $71.34 million, up 28.6% year over year and above estimates of $65.60 million.
• Defense and space demand drove growth: Defense revenue rose 40% and space revenue surged 86%; backlog reached a record $557 million, with orders of approximately $96 million and a 1.3x book-to-bill ratio.
• Guidance was reaffirmed, though profitability faces pressure: Graham maintained fiscal 2027 revenue guidance of $285 million–$295 million and adjusted EBITDA guidance of $35 million–$40 million, while gross margin declined due largely to sales mix and net income fell year over year.

Graham (NYSE:GHM - Get Free Report) released its earnings results on Thursday. The industrial products company reported $0.49 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.27 by $0.22, FiscalAI reports. The company had revenue of $71.34 million during the quarter, compared to analyst estimates of $65.60 million. Graham had a return on equity of 11.94% and a net margin of 5.10%.Graham's quarterly revenue was up 28.6% on a year-over-year basis. During the same period in the prior year, the company posted $0.45 earnings per share.

Here are the key takeaways from Graham's conference call:

• Strong start to fiscal 2027: Revenue rose 29% to a record $71.3 million, adjusted EBITDA increased 28% to $8.8 million, and backlog reached a sixth consecutive quarterly record of $557 million. Orders totaled $96 million, producing a 1.3x book-to-bill ratio.
• Defense demand remains robust: Defense revenue grew 40%, supported by submarine, torpedo, radar, and directed-energy programs. Graham received approximately $61.8 million in new and follow-on defense orders, including a combined approximately $43 million in Mark 48 and Mark 19 awards.
• Space growth appears increasingly structural: Space revenue increased 86% and orders reached $14.4 million, or a 2.3x book-to-bill ratio, as development programs moved into production. Management said the current quarterly revenue run rate represents a new normal, though orders may remain lumpy.
• Full-year guidance was unchanged: Graham continues to forecast fiscal 2027 revenue of $285 million–$295 million and adjusted EBITDA of $35 million–$40 million, while targeting 14%–16% adjusted EBITDA margins by fiscal 2029. First-quarter gross margin declined year over year to 25% due largely to sales mix, and energy and process capital-project pushouts remain a headwind.
• Balance sheet and capacity investments support growth: Following a $50 million strategic investment, Graham ended the quarter with $27 million of cash, no debt, and approximately $75 million of revolver availability. The company is continuing investments in automation, testing, and a new 30,000-square-foot manufacturing facility, while FlackTek contributed $6.6 million of revenue and $13.2 million of orders.

Graham Price Performance

GHM traded up $6.93 during trading on Friday, reaching $111.89. The stock had a trading volume of 251,272 shares, compared to its average volume of 185,730. The business has a 50-day moving average of $107.15 and a 200-day moving average of $93.45. Graham has a one year low of $46.58 and a one year high of $125.82. The company has a debt-to-equity ratio of 0.09, a quick ratio of 0.68 and a current ratio of 1.00. The stock has a market cap of $1.31 billion, a PE ratio of 99.02 and a beta of 1.04.

Institutional Investors Weigh In On Graham

A number of hedge funds have recently made changes to their positions in GHM. Invesco Ltd. grew its holdings in shares of Graham by 1,993.3% during the 4th quarter. Invesco Ltd. now owns 135,879 shares of the industrial products company's stock valued at $8,728,000 after purchasing an additional 129,388 shares during the last quarter. XTX Topco Ltd purchased a new stake in Graham during the fourth quarter valued at about $948,000. Uniplan Investment Counsel Inc. boosted its position in Graham by 18.0% during the fourth quarter. Uniplan Investment Counsel Inc. now owns 47,865 shares of the industrial products company's stock valued at $3,074,000 after buying an additional 7,311 shares during the period. Balyasny Asset Management L.P. grew its stake in shares of Graham by 52.3% during the fourth quarter. Balyasny Asset Management L.P. now owns 9,761 shares of the industrial products company's stock valued at $627,000 after buying an additional 3,354 shares during the last quarter. Finally, American Capital Management Inc. grew its stake in shares of Graham by 15.8% during the fourth quarter. American Capital Management Inc. now owns 46,803 shares of the industrial products company's stock valued at $3,006,000 after buying an additional 6,374 shares during the last quarter. 69.46% of the stock is currently owned by institutional investors.

Graham News Roundup

Here are the key news stories impacting Graham this week:

• Positive Sentiment: Earnings and revenue exceeded expectations. Graham reported quarterly EPS of $0.49, above the $0.27 consensus estimate, while revenue reached $71.34 million versus expectations of $65.60 million. Revenue increased 28.6% year over year. Graham Q1 earnings and revenues surpass estimates
• Positive Sentiment: Orders and backlog support future growth. First-quarter orders totaled $95.9 million, producing a 1.3x book-to-bill ratio, and backlog reached a record $557.2 million. Management reaffirmed fiscal 2027 revenue guidance of $285 million to $295 million, broadly in line with the $289 million analyst consensus. Graham fiscal Q1 net sales and backlog update
• Positive Sentiment: Defense contract wins reinforce demand. Graham was awarded more than $43 million in contracts for mission-critical submarine and turbomachinery products, supporting its defense-focused growth outlook. Graham awarded more than $43 million in defense contracts
• Positive Sentiment: An investor letter cited Graham’s strong execution and improving sentiment toward small-cap stocks as factors supporting the company’s recent performance. Strong execution drove Graham higher
• Neutral Sentiment: News about a Russia sanctions bill sponsored by U.S. Senator Lindsey Graham is unrelated to Graham Corporation NYSE: GHM and should not be interpreted as a company-specific catalyst. Russia sanctions bill advances in Senate
• Negative Sentiment: Despite strong sales, net income declined to $3.9 million from $4.6 million a year earlier, and diluted EPS fell to $0.33 from $0.42 in the prior-year period. The company also issued $50 million of stock during the quarter, creating potential dilution.

Wall Street Analysts Forecast Growth

A number of brokerages recently weighed in on GHM. Weiss Ratings downgraded shares of Graham from a "hold (c+)" rating to a "hold (c)" rating in a report on Wednesday, July 29th. Northland Securities lifted their price objective on shares of Graham from $111.00 to $135.00 and gave the company an "outperform" rating in a research note on Tuesday, June 23rd. Oppenheimer increased their target price on Graham to $130.00 and gave the stock an "outperform" rating in a research report on Thursday, June 25th. Wall Street Zen lowered Graham from a "hold" rating to a "sell" rating in a report on Saturday, June 13th. Finally, Zacks Research lowered Graham from a "strong-buy" rating to a "hold" rating in a research note on Wednesday, June 10th. Two analysts have rated the stock with a Buy rating and three have given a Hold rating to the company. According to data from MarketBeat, Graham currently has a consensus rating of "Hold" and a consensus target price of $132.50.

About Graham

Graham Corporation NYSE: GHM is a U.S.-based industrial engineering company that designs, manufactures and services vacuum and heat transfer equipment. Its core offerings include liquid ring vacuum pumps, surface condensers, heat exchangers and custom-engineered vacuum systems. These products play a critical role in energy-intensive industries, where reliable removal of non-condensable gases and efficient heat exchange are vital to process performance.

The company's technologies find application across a range of end markets, including power generation, petrochemical, oil and gas, LNG, and semiconductor manufacturing.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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